Old Second Bancorp Inc (OSBC)

History and Background

Old Second Bancorp, Inc. was founded in 1871 and is headquartered in Aurora, Illinois. It has grown through acquisitions and organic expansion, providing community banking services throughout the Chicagoland area.

Core Business Areas

• Commercial Banking: Provides a range of commercial lending products, deposit services, and treasury management solutions to businesses.
• Retail Banking: Offers checking and savings accounts, mortgage loans, consumer loans, and other retail banking services to individuals.
• Wealth Management: Provides wealth management and trust services to individuals and families.

Leadership and Structure

James Eccher serves as the Chief Executive Officer. The company has a board of directors that oversees the management team. The organizational structure is typical of a community bank, with divisions for commercial lending, retail banking, and wealth management.

Key Offerings

• Commercial Loans: Loans to businesses for working capital, equipment financing, and real estate. Market share data is fragmented but estimated at <1% of the Illinois commercial loan market. Competitors include larger regional and national banks like JP Morgan Chase (JPM), BMO Harris, and Fifth Third Bank (FITB).
• Mortgage Loans: Residential mortgage loans for home purchase and refinancing. Market share is also fragmented, estimated at <1% of the Illinois mortgage market. Competitors include Quicken Loans, U.S. Bank (USB) and local credit unions.
• Deposit Accounts: Checking, savings, and money market accounts for individuals and businesses. Market share is highly localized and difficult to ascertain precisely. Competitors include national banks and local credit unions.

Industry Overview

The banking industry is currently facing challenges from rising interest rates, increased regulatory scrutiny, and competition from fintech companies. Community banks are focusing on building relationships and providing personalized service to differentiate themselves.

Positioning

Old Second Bancorp is positioned as a community bank focusing on local relationships and personalized service. Its competitive advantages include its deep understanding of the local market and its commitment to serving the needs of its customers.

Total Addressable Market (TAM)

The TAM for banking services in the Chicagoland area is estimated to be in the billions of dollars annually. Old Second Bancorp's positioning allows it to capture a small but significant share of this market through its focus on local relationships.

Key Competitors

• JPM
• BMO
• FITB

Competitive Landscape

Old Second Bancorp faces intense competition from larger national banks and smaller community banks. Its advantages include its local market knowledge and its commitment to customer service. Its disadvantages include its smaller scale and its limited geographic footprint.

West Suburban Bancorp

• Year: 2018
• Acquisition Price (USD millions): 297
• Strategic Rationale: Expanded market share in the Chicagoland area and added new branches.

Historical Growth: Old Second Bancorp has grown steadily over the past decade through a combination of organic growth and acquisitions.

Future Projections: Analysts expect Old Second Bancorp to continue to grow its revenues and earnings at a moderate pace over the next few years. The company's focus on local markets and its commitment to customer service should help it to maintain its competitive position.

Recent Initiatives: Recent strategic initiatives include investments in digital banking technology, expansion into new markets, and acquisitions of smaller banks.

Old Second Bancorp is a community bank with strong local market knowledge and established customer relationships. While facing competition from larger banks and fintech companies, it maintains a healthy balance sheet and positive cash flow. The company's focus on local markets and digital banking initiatives position it for continued growth. However, it must be aware of threats like rising interest rates and economic downturns.

Data Sources:

• Company Filings (10-K, 10-Q), Analyst Reports, Press Releases, FDIC Data

Disclaimers:

This analysis is for informational purposes only and does not constitute investment advice. Market conditions and company performance can change rapidly, so it is essential to conduct thorough research before making any investment decisions.